Solar tariff would hurt growing Colorado industry

For Coloradans concerned with jumpstarting the job market and boosting their home values, our state's fast-growing solar industry is a bright spot in an uncertain economy.

Unfortunately, the industry's progress is imperiled by the threats of punitive tariffs, rising prices and a trade war with China.

A German-owned company, SolarWorld, with a facility in Oregon, has filed a petition with the U.S. Department of Commerce requesting tariffs of up to 250 percent on solar cells and modules imported from China.

The tariff would supposedly benefit SolarWorld's business -- solar cell and module manufacturing -- which accounts for about two to three percent of the American solar industry. If a tariff is imposed, Chinese manufacturers will simply shift their production to nearby nations, such as Taiwan, Singapore South Korea, and Vietnam. The shift in manufacturing to other Asian markets does nothing to help the domestic solar manufacturing market.

Meanwhile, soaring prices and a spiraling trade war with China would devastate the vast majority of the American solar industry. Most U.S. solar businesses and employees are involved in engineering, designing, developing, assembling, installing and maintaining solar energy systems and producing the equipment that connects these systems with the power grid.

These companies and workers are helped, not hurt, by falling prices for solar modules, which declined from approximately $2 per watt in 2010 to $1 per watt currently. Meanwhile, at a time when the U.S. economy was expanding by less than one percent, the U.S. solar industry grew by 6.8 percent, adding some 7,000 jobs and bringing its total workforce to more than 100,000. This year, the industry is expected to add another 24,000 employees.

Here in Colorado, the solar industry already has an estimated 6,186 employees at 1,020 locations -- the second largest solar workforce in the nation and the leader in solar jobs per capita. Colorado's solar industry benefits from the state's Renewable Portfolio Standard, which requires large utilities to produce 30 percent of their power from renewable sources by 2020.

But, in Colorado and across the country, the proposed tariff could halt to the growth in solar businesses and jobs. According to a recent study by the economic consulting firm, the Brattle Group, high tariffs on imported solar panels would result in the loss of as many as 32,712 solar industry jobs in 2012, 40,593 by 2013, and 49,589 by 2014.

Besides costing jobs, a special tariff and soaring prices would make it more difficult for families to increase their home values by investing in solar energy systems.

Moreover, solar energy systems offer environmental as well as economic advantages. As the National Renewable Energy Laboratory has reported, the average residential solar energy system saves about 100 tons of carbon dioxide. The positive impact on the environment is equivalent to planting 67 trees.

When it comes to preserving jobs and promoting economic growth, protectionism is a proven loser. As Steve Jobs and other outstanding innovators have explained, the best way for American companies to create, keep and bring back the best jobs is by training their employees, insisting on high-quality work, and rewarding the best performers. High skills and high quality, not high tariffs, should be our country's strategy to compete and win in the global economy.

I have seen this strategy succeed in two companies that I founded and now lead -- Lighthouse Solar and Lumos -- which design, develop, distribute and install solar energy systems. With well-trained and, when possible, professionally certified employees, these companies have grown steadily since their founding in 2006.

As a wise person once said, "For every complex problem, there is an answer that is clear, simple -- and wrong." Protectionism is the wrong answer for the opportunities and challenges confronting the American solar industry.

Scott Franklin is the founder and president of Lighthouse Solar and Lumos Solar in Boulder.

2 Responses to Solar tariff would hurt growing Colorado industry

topher(3/15/2012 @ 9:56am)

I can only imagine the real motivations behind SolarWorld’s seemingly suicidal move of leveling accusations at China that could destroy the growing solar industry in the United States:

First, they are German owned, so perhaps the German solar industry to would be first in line to receive the glut of cheap solar panels that would be available to other countries if the US suddenly raised tariffs dramatically.

Second, perhaps SolarWorld’s German owners also are heavily invested in the American coal industry, and delivering a death blow to the solar energy industry in would pay dividends in their other investments.

Third, perhaps the boys at SolarWorld decided to try what nobody in their right minds tried with apparel and computer manufacturing - keep China out of the game by killing the industry in the first place.

Tim Pugh(4/18/2012 @ 8:28am)

In U.S. history, tariffs have been favored by the manufacturing sector and disatrous for everyone else. U.S. manufacturing is now highly automated and requires fewer employees than were needed some 30 years ago. We build cars with robots, not men.

Manufacturing work may return to the U.S., but manufacturing jobs will not. I think this is a point lost on Washington, D.C., but is surely understood by SolarWorld as they are in the manufacturing business. Whatever may be SolarWorld's motivation for seeking this tariff, creating U.S. jobs is not one of them.